Measuring E-commerce Website Core Competence Based on Principal Component Analysis: The Case of China

As a result of the dot-com collapse and the slowdown in the economy, the flood of venture capital dollars for e-commerce has evaporated. E-commerce companies have been enforced to review their core competence. E-commerce Website core competence (EWCC) has been touted to be a critical component that can assist a company in its strategies to become successful. This study proposes a model for evaluating e-commerce website core competence based on principal component analysis (PCA). The model includes not only financial and operational measures, but also customer satisfaction measures by telephone survey. An illustrative example demonstrates that the PCA model can not only effectively reflect the relative core competence of e-commerce firms but also identify their potential problems. Manager can, therefore, take the right remedial actions.